SJW Group rejects California Water Service’s revised proposal

SJW Group has announced that its board of directors rejected the revised proposal of California Water Service Group (Cal Water) submitted on 13 August to acquire all outstanding shares of SJW Group common stock for $70.00 per share in cash.

The revised proposal is a 2.6% increase from Cal Water’s earlier offer of $68.25 each share.

In consultation with external legal and financial advisors, the SJW Group board concluded that Cal Water’s revised proposal is not likely to lead to a superior proposal under the terms of SJW Group’s amended merger agreement with Connecticut Water Service, which was announced on 6 August.

Furthermore, the SJW Group’s board reaffirmed its recommendation to its stockholders not to tender their shares into Cal Water’s present tender offer.

The board also reaffirmed its support to the transaction under which SJW Group will acquire all outstanding shares of Connecticut Water for $70 per share in cash.

The deal with Connecticut Water has secured support from SJW Group stockholders. This deal is expected to close in the first quarter of 2019.

SJW Group chairman, president and chief executive officer Eric Thornburg abstained from voting on Cal Water’s revised proposal as he owns Connecticut Water shares as well as the all-cash nature of the combination with Connecticut Water.

SJW Group’s board of directors’ lead independent director and the Roscoe Moss Jr. Revocable Trust trustee Robert A. Van Valer said: “All of us on the Board of SJW Group take our fiduciary responsibilities to stockholders seriously and, after a deliberate and thorough review, we have concluded that Cal Water’s revised proposal is neither the most compelling nor the most certain path forward for our stockholders, or for our customers, employees and the communities we serve.

“We remain confident that SJW Group will create more value for our stockholders and deliver greater benefits to all of our stakeholders by proceeding with the immediately and increasingly accretive combination with Connecticut Water.”

According to the SJW Group board, the Cal Water’s revised proposal undervalues SJW Group.

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